How Much Does a Geothermal Heat Pump Cost?

Geothermal heat pumps cost more than regular HVAC systems.

Geothermal heat pumps cost more than regular HVAC systems.

Instead of generating heat through burning fuel, geothermal heat collects the natural heat of the earth, which is then distributed to the various rooms throughout a house. When considering geothermal energy as an alternative to natural gas, propane or electricity for your place of residence, you may focus on finding the least expensive geothermal pump, say if you are retrofitting one to serve as your HVAC replacement. However, each house has differing needs and its own geographical context, which should be considered in addition to just the dollar value of the pump. Moreover, other necessary components could be just as costly.

Geothermal Pump Portion of Cost

The cost of the geothermal pump will depend on the capacity that you need. Pumps for homes come in various sizes and may be 3 to 6 tons. Depending on the size of your house and the climate of your geographic area, your contractor will help you choose an appropriate size. Larger models cost more. For a 3,500 sq. ft. home in Pennsylvania, featured by Geothermal Genius, the cost of a geothermal pump was $14,000. This was actually a little over half of the total cost of installation, since the other critical component, a loop system, was an additional expense. Energy Environmental Corporation estimates that a 5 ton geothermal heating and cooling system for a 2,500 sq. ft. house will be $29,500, whereas a 6 ton system for the same square footage would be $34,000, including parts and labor.

Loop Portion of Cost

The pump, which is above-ground, works in concert with an underground network of loops embedded into the earth. The loops, or pipes, are what collect the earth's heat to redirect it into the house. This part of the expense can be as formidable as the pump is, and should be factored into your choice of pump. Different loop setups can be more expensive than others: vertical loop systems are buried deeper into the ground than are horizontal loops and cost more; underwater coil systems can reduce costs but are only an option for those with a body of water near the house.

Federal Tax Credits

While the cost of geothermal heating and cooling systems can come as a shock to homeowners, they can also take advantage of a 30 percent federal tax credit on product and installation costs. Additionally, while other renewable energy systems have a cap on the amount of tax credit they can claim, geothermal pumps have the distinction among renewables of having no upper limit on the credit. However, the credit, which began in 2005 and was revised in 2009 to remove the limit, will only be good until 2016.

Cost Saved Over Time

What with tax credits to ease the pain of the high cost of a geothermal heat pump system, you might come to terms with the initial expense, and even more so as your overall energy bills whittle down to ultimately pay for the upfront costs. Depending on your model, that might take anywhere from two to 15 years. In the meantime, you will maintain comfortable temperatures while saving on fuel purchases. Compared with a propane-based system, your annual cost savings could be $3,000 or more, depending on your consumption.

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